End of year optimism? The return of UK real estate

As 2024 draws to a close, there's an undeniable sense of optimism in the air across both the legal and property industries.

From blockbuster property deals breathing new life into major cities to law firms prioritising AI training amongst their real estate teams, here's what's been catching the eye of our legal engineers* in the last month — and what the team is anticipating for the year ahead. 

*What’s a Legal Engineer? At Orbital Witness, our Legal Engineers are all ex-real estate lawyers with experience working in a range of private practice law firms and leading in-house teams. The team are using their domain-specific knowledge to develop our products and work alongside our go-to-market teams. 

Big city deals are set to ignite momentum

After a lull in substantial property transactions over the past couple of years, major real estate deals appear to be making a comeback in the capital. Notable listings such as Brookfield's CityPoint tower near Moorgate, priced at £500 million, and Nuveen's "Can of Ham" building, listed at £322 million, signal a renewed confidence in the commercial property market. Additionally, Argyll's portfolio of trophy buildings in the City of London and the West End, seeking up to £400 million, showcases a revived appetite for prime real estate (particularly offices), compared to this time last year.

While these listings reflect a growing optimism among sellers, they also suggest a cautious approach, as many appear to be testing the market to gauge investor interest and all eyes are on these deals. Nevertheless, this significant resurgence indicates positive momentum in the commercial property market. The return of notable office deals hints that investors are ready to move swiftly, potentially pushing through some of the year's largest sales in 2024 during this quarter. It's an encouraging sign for the industry, hinting at a long-awaited market rebound and an optimistic outlook for commercial real estate in 2025.

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Law firms are prioritising AI proficiency

The legal sector is witnessing a transformative shift as firms place a stronger emphasis on AI proficiency internally: especially for trainees and junior lawyers, whose careers are likely to be heavily shaped by AI technology. Firms like A&O Shearman and Travers Smith are already leading the charge by integrating AI-focused tests and training into their graduate recruitment processes and training programs respectively.

We see this trend as a win-win for AI adoption in the legal market. Here’s why:

- as legal professionals become more comfortable with AI tooling, we'll see its use lead to even greater efficiency gains and further innovation in legal practices

- an increase in the certifications and accreditations in AI offered by trusted providers will not only bolster individual CVs but also elevate law firms’ standing in a competitive recruitment market and add to the value offered by the providers

- partnerships between law firms and AI solution providers often include bespoke training sessions, fostering a deeper integration and greater uptake of the technology to the benefit of legal workflows.

From early adopters to an early majority

‘Lawyers and firms are recognising that integrating AI isn't just beneficial but essential for staying relevant in both the minds of clients and in attracting future talent.’

Leaving aside the growth in legal AI training, it is now undeniable that AI is no longer a topic for the sidelines. It's front and centre at conferences, in legal publications and in conversations within law firm offices. Comparisons to AI are being drawn to the advent of computers, the internet and email in terms of the revolutionary impact AI will have on the legal profession and associated workstreams.

This growing buzz signifies that we may be moving into a new phase in the technology adoption curve, from excitement amongst the early adopters – to an increasing acceptance of AI from the (early) majority. The legal industry is feeling the pressure to adapt, driven by competitive forces and client expectations.

Lawyers and firms are recognising that integrating AI isn't just beneficial but essential for staying relevant in both the minds of clients and in attracting future talent.

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Looking ahead…

The convergence of these trends paints an exciting picture as we end 2024. The revival of significant property deals indicates a healthy market poised for growth. Simultaneously, the legal industry's embrace of AI (from training the next generation of lawyers to integrating technology into everyday practice) signals a future where innovation and tradition can coexist, for the benefit of everyone involved.

As this dynamic landscape continues to evolve – and at pace – collaboration between legal professionals, technologists and property experts will be key to harness these developments. It's our belief that this drive for progress and innovation is shaping the future of both the property and legal industries, for the better.

Written by Ella Ovenden, Marija Stavric & Ben Sainsbury from our Legal Engineering team here at Orbital Witness.